Alexandria, Va., July 16, 2004 — A new study published by the Graphic Arts Marketing Information Service (GAMIS), a special interest group of PIA/GATF provides an in-depth look at direct mail. Kubas Consultants, Toronto, Canada, completed the research for The Future of Direct Mail. This new GAMIS study provides market size estimates, industry trends and demand forecasts through 2010, as well as insights about advertisers' attitudes and usage of direct mail. According to Kubas, direct mail will represent about $36 billion, or 10% of all U.S. media and marketing expenditures in 2004. Direct mail expenditures will continue to experience above average growth, projected at 5.6% per annum in real terms over 2004 to 2007. In Canada, 2004 direct mail expenditures are projected to be $1.8 billion in Canadian dollars, or $1.4 billion in U.S. dollars, based on an exchange rate of 0.74 Canadian per U.S. dollar. Canadian real annual expenditure growth rates are forecast to be 3.3% through 2007. Research from the Direct Marketing Association's (DMA) indicates that sales effectiveness of direct mail per-dollar-of-expenditure continues to grow, and also continues to out-perform the average ratio for direct marketing overall. The GAMIS study supports DMA's findings and revealed that, over the last five years, direct mail volumes and expenditures have continued to grow despite the Internet, and even despite some weakening in consumer response rates. This is likely because direct mail's sales effectiveness and return on investment have continued to strengthen. The study noted that advertisers will increase their focus on improving returns of their marketing investments. Direct mail can deliver an attractive ROI and offers a mechanism to document results. The research study revealed a strong interest among leading-edge direct mail advertisers to actively exploit two areas: • Improved targeting through database management and related analytics to reach specific individuals, groups, or types of customers; and, • Employing variable content to deliver more personalized and customized direct mail. As a result demand for digital printing and variable imaging will intensify. Printers and direct mail suppliers should note that direct mail will likely diverge into two parallel, but operationally different business models: High volume, low cost per unit “commoditized” mailings; and, lower volume, higher value-added, more personalized mailings. Because of the implications for plant, equipment, and training, printers will likely have to choose between the “high volume” versus a “high value” business model. Advertisers will increasingly look to their printers to handle most elements of direct mail production from commodity printing through to complex one-to-one direct mail campaigns including the accompanying distribution requirements. Thus, printers will have to become much better at supplier coordination and logistics management. Finally, while the US postal issues are a concern, general consensus is that industry efforts will be successful in bringing about reform and reducing the threat for huge postage increases. The report identifies significant opportunities for the members of PIA/GATF's Digital Printing Council (DPC). The DPC was a contributing sponsor of the research and a comprehensive summary of findings is being published for DPC members. The comprehensive “Future of Direct Mail” report is available exclusively through membership in GAMIS. For more information, contact Jackie Bland, GAMIS Executive Director at (703) 519-8179 or by e-mail at [email protected]. Membership details are also found on the web at www.gamis.org. GAMIS is a special interest group of PIA/GATF. It is the premier market research association of the graphic arts industry with members from diverse segments of the printing industry.